Hogs
Price action: October lean hogs fell 15 cents to $97.375, near the session low after scoring a contract high early on today.
Fundamental analysis: Profit taking from the speculators was featured in the lean hog futures market today. Gains in hogs were also limited by a sell off in the cattle futures markets today. However, selling interest in hog futures was tempered by a solid price uptrend that remains in place on the daily chart for October lean hogs.
The latest CME lean hog index is steady at $106.14. Wednesday’s projected cash hog index is down 14 cents at $106.00. Today’s national direct 5-day rolling average cash hog price quote is $106.49. The noon report today showed pork cutout value down $2.31 to $111.77, with losses in all cuts. Movement at midday was good at 220.70 loads.
Technical analysis: October lean hog futures today scored a bearish “key reversal” down on the daily bar chart, which is one early technical clue that a market top is in place. Bulls still have the overall near-term technical advantage. A choppy, two-month-old price uptrend remains in place on the daily bar chart. The next upside price objective for the hog bulls is to close October futures prices above solid chart resistance at $100.00. The next downside price objective for the bears is closing prices below solid technical support at $93.50. First resistance is seen at the contract high of $98.90 and then at $100.00. First support is seen at last Friday’s low of $96.725 and then at $95.00
What to do: Get current with feed coverage.
Hedgers: You are carrying all production risk in the cash market.
Feed needs: You should have all your soymeal needs covered through September in the cash market, with half coverage for October, November and December. For corn, you now have all needs through October covered in the cash market.
Cattle
Price action: October live cattle fell $1.15 to $233.45. September feeder cattle lost 47 1/2 cents to $358.325. Both markets closed near mid-range.
Fundamental analysis: The cattle market faded today as bulls could not show important follow-through price strength after good gains posted Monday. That’s a worrisome signal for the bulls. Weakening cash cattle and boxed beef market fundamentals are squelching buying interest in the cattle futures markets. It may take a bullish USDA monthly cattle-on-feed report this Friday afternoon to remind cattle traders of the still-tight feedlot cattle supplies to spark the bulls.
No cash cattle trading has been reported by USDA yet this week. Last week’s cash cattle trade averaged $239.33, down $3.22 from the previous week. The noon report today showed wholesale boxed beef cutout values lower, with Choice-grade down $2.70 to $395.83, while Select fell $2.86 to $375.94. Movement at midday was decent at 84 loads. The Choice-Select spread is presently $19.89.
Technical analysis: The next upside price objective for the live cattle bulls is to close October futures above resistance at $238.00. The next downside technical objective for the bears is closing prices below solid technical support at last week’s low of $228.80. First resistance is seen at this week’s high of $234.75 and then at $236.00. First support is seen at this week’s low of $230.975 and then at last week’s low of $228.80.
The next upside price objective for the feeder bulls is to close September futures prices above technical resistance at $363.00. The next downside price objective for the bears is to close prices below solid technical support at last week’s low of $349.725. First resistance is seen at $360.00 and then at $362.00. First support is seen at $355.00 and then at this week’s low of $353.00.
What to do: Get current with feed coverage. Carry all production risk in the cash market for now.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: For soymeal, you have full coverage in cash through July, with half of your needs for August, September, October, November and December covered in cash. For corn, you have all needs through August covered in the cash market, with half of your needs for September and October covered in cash.